The Importance of Financial Statements for Management

The interests of the company's management of the company's financial statements that they also make have a certain meaning. For the management of the financial statements that are made is a reflection of their performance in a certain period. The following are the importance of financial statements for management

1. With the financial statements made, management can assess and evaluate their performance in a period, whether they have achieved the targets or objectives set or not

2. Management will also see their ability to optimize the company's existing resources

3. Financial statements can be used to see the strengths and weaknesses of the company at this time so that it can be the basis for future decision making

4. Financial statements can be used to take financial decisions going forward based on the strengths and weaknesses of the company, both in terms of planning, supervision, and future control so that the desired targets can be achieved.

In assessing its performance, the management can make its own predetermined measurements such as

1. Earnings growth in a period, whether reaching the target or even exceeding the target. If it reaches the target or exceeds the target, management can be said to be successful. However, on the contrary if the profits do not reach the target, they can be said to have failed in carrying out the company's mission

2. How is the development of company resources such as the development of assets owned, whether experiencing additional or just the opposite? from this angle it can be seen that we can judge whether management is working efficiently or not

3. At the end of management, these financial statements will also determine to obtain compensation in the form of bonuses, careers, or vice versa from the business owner. However, if reaching the target as set or even exceeding the target, it is the company's obligation to give rewards for hard work done such as bonuses, and career advancement.

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